Effects of IFRS Adoption on the Financial Performance and Value of Listed Banks in Nigeria

Nwaogwugwu, Chuks Chikwendu

doi:10.11648/j.jfa.20200804.12

Cited by 3 publications

(1 citation statement)

References 12 publications

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“…Lee et al, 2010;Li, 2010) and improved comparability of financial statements internationally (e.g. Yip and Young, 2012;Horton et al, 2012;Brochet et al, 2013;Ozu et al, 2018;Hassan, 2019;Nwaogwugwu, 2020).…”

Section: Introductionmentioning

confidence: 99%

IFRS adoption and accounting-based performance measures: evidence from an emerging capital market

Ebaid

2022

JMB

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PurposeThis study aims to examine the economic consequences of the adoption of International Financial Reporting Standards (IFRS) in Saudi Arabia. More specifically, the study examines the impact of the mandatory adoption of IFRS on the accounting-based performance measures.Design/methodology/approachData on study variables were obtained manually from the published financial statements of 67 of listed companies in the Saudi stock market during the period 2014–2019. The study addressed the research hypotheses by comparing the accounting-based performance measures computed under the Saudi accounting standards for three years (2014–2016) before the mandatory adoption of IFRS and the corresponding three years (2017–2019) after the mandatory adoption of IFRS. The Mann–Whitney U Test was used to investigate the significance of differences between the values of performance measures in the pre- and post-mandatory adoption periods.FindingsThe findings of the study revealed that there were no significant differences between the values of accounting-based performance measures related to the three performance categories (i.e. profitability, liquidity and leverage) in the post-mandatory adoption period (IFRS) compared to the values of these measures in the pre-mandatory adoption period (Saudi accounting standards).Research limitations/implicationsThe results of the study indicated that there is a good convergence between the Saudi accounting standards that were implemented before 2017 and the IFRS that began to be applied starting from 2017. This convergence resulted in a low significant impact of IFRS on the financial statements of companies and then on the accounting-based performance measures calculated from them. However, this study suffers from some limitations, the most important of which is the small sample size as a result of the small number of listed companies in the Saudi market during the study period.Originality/valueAlthough the impact of the adoption of IFRS have always been a subject of intense research in developed countries, the study of the impact of the adoption of IFRS in developing countries still limited. This study contributes to the literature by examining the economic consequences of adopting IFRS in Saudi Arabia as one of developing countries.

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Section: Introductionmentioning

confidence: 99%

IFRS adoption and accounting-based performance measures: evidence from an emerging capital market

Ebaid

2022

JMB

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The effect of IFRS on the financial ratios: Evidence from banking sector in the emerging economy

Abebe

2022

Cogent Economics & Finance

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Does the implementation of IFRS improve transparency regarding the company's financial conditions?: evidence from an emerging market

Ebaid

2022

PRR

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PurposeThis study aims to examine whether there are differences between financial statements prepared in accordance with International Financial Reporting Standards (IFRS) and financial statements prepared in accordance with local accounting standards in terms of its ability to present the financial conditions of companies listed on the Saudi Stock Exchange as one of the emerging markets.Design/methodology/approachData on study variables were obtained from the published financial statements of 67 of listed companies in the Saudi Stock Exchange during the period 2014–2019. The study addressed the research hypotheses by using Altman Z-score model. Both the T-test and Wilcoxon rank test were used to investigate the significance of differences between the values of Z-score and the individual variables included in the model in the pre- and post-IFRS mandatory adoption periods.FindingsThe results revealed a decrease in the values of Z-score as well as the values of the individual variables included in the model in the period following the adoption of IFRS than it was before the adoption of IFRS, which indicates the ability of IFRS to show the financial conditions of companies more transparently than local accounting standards. However, the results of the T-test and Wilcoxon test showed that these decreases were not statistically significant.Research limitations/implicationsThis study has some limitations, including the small sample size as a result of the small size of the Saudi Stock Exchange, As well as the reliance of this study only on the Altman model with its five variables in assessing financial conditions without examining the impact of other factors that may affect the financial conditions of companies.Practical implicationsFinancial conditions of the companies have important implications for multiple parties such as management, government, investors and others as an early warning sign that enables them to take the necessary measures early before the actual bankruptcy occurs and what results in costs.Originality/valueAlthough assessing financial conditions of the companies is one of the basic uses of accounting information, this topic has not received sufficient attention as a means to test the benefits of adopting IFRS, especially in emerging markets such as Saudi Stock Exchange. This is the first study to examine the impact of adopting IFRS on the transparency of financial reporting in assessing financial conditions in Saudi Arabia.

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Effects of IFRS Adoption on the Financial Performance and Value of Listed Banks in Nigeria

Cited by 3 publications

References 12 publications

IFRS adoption and accounting-based performance measures: evidence from an emerging capital market

IFRS adoption and accounting-based performance measures: evidence from an emerging capital market

The effect of IFRS on the financial ratios: Evidence from banking sector in the emerging economy

Does the implementation of IFRS improve transparency regarding the company's financial conditions?: evidence from an emerging market

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